Direct Tax Cases Weekly Round-Up: 02 To 08 June 2024

Update: 2024-06-09 04:00 GMT
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Delhi High CourtOnce Issue Of Arm's Length Remuneration Settled By TPO, Question Of Ascertaining Existence Of PE Is Academic; Delhi High Court Quashes Reassessment ProceedingsCase Title: Progress Rail Locomotive Inc. (Formerly Electro Motive Diesel Inc.) Versus Deputy Commissioner Of Income-TaxCitation: 2024 LiveLaw (Del) 671The Delhi High Court, while quashing the reassessment...

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Delhi High Court

Once Issue Of Arm's Length Remuneration Settled By TPO, Question Of Ascertaining Existence Of PE Is Academic; Delhi High Court Quashes Reassessment Proceedings

Case Title: Progress Rail Locomotive Inc. (Formerly Electro Motive Diesel Inc.) Versus Deputy Commissioner Of Income-Tax

Citation: 2024 LiveLaw (Del) 671

The Delhi High Court, while quashing the reassessment proceedings initiated by the income tax department against the Caterpillar Group, held that once the issue of arm's length remuneration was settled by the Transfer Pricing Officer (TPO), the question of ascertaining the existence of a permanent establishment (PE) was academic.

Under-Reporting And Misreporting Are Viewed As Separate And Distinct Misdemeanours; Delhi High Court Quashes Penalty

Case Title: GE Capital Us Holdings Inc Versus Dy Commissioner Of Income Tax (International Taxation)

The Delhi High Court, while quashing the penalty, has held that both under-reporting and misreporting are viewed as separate and distinct misdemeanours.

Exemption Allowable On Donations Made By One Charitable Trust To Other Charitable Institutions For Temporary Period: Delhi High Court

Case Title: Commissioner Of Income Tax (Exemptions) Versus M/S Jamnalal Bajaj Foundation

The Delhi High Court has held that exemption is allowable on donations made by one charitable trust to other charitable institutions for a temporary period.

Initiation Of Section 153C Assessment Proceedings Falling Beyond Maximum 10 Years Block Period Unsustainable: Delhi High Court

Case Title: Flowmore Limited Versus Deputy Commissioner Of Income Tax, Central Circle 28, New Delhi & Anr.

The Delhi High Court has held that the initiation of Section 153C of the Income Tax Act assessment proceedings falling beyond the maximum 10-year block period is unsustainable.

ITAT

Salary Reimbursements Of Seconded Employees Is Not Taxable As Fees For Technical Services: ITAT

Case Title: IBM Canada Limited Versus DCIT

The Bangalore Bench of Income Tax Appellate Tribunal (ITAT) has held that salary reimbursements of seconded employees are not taxable as fees for technical services.

ITAT Quashes Assessment Order Against Bret Lee As Reassessment Notice Not Served Within Limitation Period

Case Title: M/s. Valeo Friction Materials India Ltd. Versus Commissioner of Customs

The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that the royalty is not included in the transaction value of the imported raw materials to demand any differential customs duty.

No Disallowance Under Section 14A Of Income Tax Act Is Warranted In Respect Of Investments Not Yielding Tax Free Income: ITAT

Case Title: DCIT Versus Paranjapee Schemes Construction Ltd.

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that disallowance has to be worked out on the basis of investment which yielded dividend during the year and not by factoring in the total amount of investment.

Computation Of 6 Assessment Years For Search Assessments U/S 153C Starts From Date Of Receiving Seized Documents: ITAT

Case Title: M/s Esha Securities Pvt Ltd Versus Dy. CIT

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the computation of six assessment years for search assessments under Section 153C of the Income Tax Act starts from the date of receiving seized documents.

Cash Deposits Made From Assessee's Parents Accumulated Savings And Income From Agricultural Activities; ITAT Deletes Addition

Case Title: Vivek Prahladbhai Patel Versus ITO

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) has deleted the addition made by the department as the cash deposits made from the assessee's parents accumulated savings and income from agricultural activities.

Section 80G Deduction Allowable On CSR Expenditure: ITAT

Case Title: M/s. Alubound Dacs India Private Limited Versus Dy. CIT

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that the deduction under Section 80G of the Income Tax Act is allowable on the expenditure in respect of corporate social responsibility (CSR).

Non-Compete Fee To Be Treated As “Revenue Receipt” From 01.04.2003: ITAT

Case Title: ACIT-2(2)(1) Versus Lyka Labs Ltd.

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that the non-competitive fee received by the assessee is treated as 'revenue receipt' in the hands of the assessee but only post-amendment, i.e., w.e.f. 01.04.2003.

Shed Of 500 Mtr. On Agricultural Land Can't Be Considered As Residential House, Section 54F Exemption Not Allowable: ITAT

Case Title: ACIT Versus Himanshu Garg

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has denied the exemption under Section 54F of the Income Tax Act on the 500-meter shed made on agricultural land that cannot be considered a residential house.

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